Team extension, extended team & out-sourcing FAQ

What is the difference between an extended team, a team extension and staff augmentation?

These 3 terms all refer to using a service provider to source and contract remote workers on a temporary (though possibly long term) basis.

There is one stand-out – staff augmentation can be used in a more general sense. You can use staff augmentation to refer to placing people in multiple roles throughout a business. But extended team and team extension refer specifically to adding people to a particular team or even a particular team project.

What is the difference between off-shoring, near-shoring, out-sourcing and an extended team/team extension?

Off-shoring is a general term that refers to using workers of a service provider in another country to fill roles or perform role-related tasks, within your business.

Near-shoring is similar to off-shoring but it implies that the workers are located in a nearby country or time zone to reduce the management and collaboration difficulties that working across widely different time zones can create.

Out-sourcing is when a project or service that would traditionally be executed in-house is handled completely by an external service provider. The service provider is normally located off-shore in an attempt to reduce costs.

Extended team or team extension is when a project team is expanded by the hiring of remote team members through a team extension provider. The extended team members working remotely report to the same management as the in-house team, they work side-by-side with the in-house team on any projects, and participate in all meetings, but all their necessary resources – computers, office space, etc – are supplied by the team extension provider.

What is the team extension model?

Under the team extension model you are responsible for managing your own project even though the work is being done by external contractors. Under an out-sourcing model the project management would also be handled externally.
The benefits of the team extension model are that you have complete control over the project and complete visibility into how it is progressing. You can spot, diagnose and fix any problems as soon as they occur.

The drawback of the team extension model is that you need a competent project manager inhouse in order to see the project to successful completion.

What is the extended team model?

The extended team model, or the extended development team model, is just the team extension model by another name. You will see both used online. Which one an author favours depends mostly on which region they’re in.

What is a core team?

The core team is made up of inhouse employees who established the project and were solely responsible for moving the project forward before a team extension is added to the effort.

The core team holds the business and domain expertise that the project relies on. They work with the team extension members under a project or product manager to complete the project and serving as a source of guidance and deep knowledge for the extended team.

 

Why do businesses use team extensions?

A team extension creates three main advantages for a business. These are particularly beneficial when the business is following the extended development team model for software bsed products.

The three main advantages of a team extension are:

  1. Rapid hiring – team extension staff are pre-vetted by the service provider. Tell them what skills you need and you can be interviewing applicants for team fit on the same day.
  2. Access to expertise – depending on your local labour market, access to certain technical skills might be difficult or very expensive. A team extension provider enables you to hire outside of your local labour market, opening you up to a larger talent pool.
  3. Predictable and manageable costs – by extending your development team using the team extension model, your cost for the extended team members is fixed once negotiated with the service provider. Furthermore, the service provider is responsible for supplying office space and equipment for the extended team members, limiting your costs to the agreed hours the team members work.

Who manages the extended team?

Unlike in out-sourcing, the management of the remote members of an extended team is handled by the business contracting them. This requires an inhouse project manager experienced in dealing with remote team members.

Post-Covid this is now the status quo. But if a business has pursued a back-to-the-office strategy for their developers, care needs to be taken that the remote members of the extended team are fully integrated into the day-to-day operations and culture of the business and especially for the project they are working on.

What happens if an extended team member doesn’t perform?

In the unlikely event that a business believes an extended team member isn’t performing well, this challenge is resolved in a similar manner to how it would be resolved for an inhouse employee.

The situation is better than that with a standard remote employee, because the extended team member is also under local supervision and monitoring by the service provider.

If the problems turn out to be unresolvable, it is quick and easy to select, vet, and contract a new extended team member from the service provider’s talent pool.

 

What kind of work can an extended team do?

An extended team can be contracted to work directly on a project. This can be in order to access expertise to develop certain features, or to shorten timelines for project completion.

Outside of software development on a business’s product, an extended team can be contracted to provide support services, such as devops for an existing team or project, and to keep important and complex applications online and available to customers.

Moving beyond software, an extended team can provide design and UX expertise early in a project, as well as ongoing customer service support and technical support once a project is online.

What are the biggest challenges in using a team extension?

The big challenges in a team extension are simply variants of the same challenges businesses face with any employee. Onboarding is critical.

Having a manager or mentor available to chat or video call in order to quickly resolve the kinds of problems that show up in the early stages of employment will make onboarding easier and get members of the team extension working productively as quickly as possible.

The other major challenge is integrating the team extension staff with the inhouse team. But this can be handled by simply holding meetings, standups, code reviews, etc, via video so that everyone can participate on an equal footing.

10 SaaS startups that can cut months off your runway

As a LEAN+Agile dev house dedicated to building apps and websites for our clients, we are always preaching buying functionality over building it to our clients.

We are as aware of their runway as they are. And we’re dedicated to getting them to launch with the best MVP possible. And when speed counts and budgets are limited, and even when they’re not, we always go for buy over build.

Our clients are often surprised by not just the quality but the depth of functionality that is now available to be integrated via APIs from thousands of providers. 

Here’s a list of some of the more useful and powerful integrations you should be considering. Note – this isn’t a survey. We’re not providing options or reviews. Think of it more as a proof of existence and a starting point for doing your own dive into the SaaS options out there. 

 

Feed as a Service – stream

A news feed or activity feed with the rich interactions we’re all accustomed to – likes, tagging friends, etc – drives engagement. Feeds aren’t just for social sites. They’re for marketplaces, ecommerce, any app or website that involves events happening in realtime that someone somewhere wants to see. If you have a database its contents can probably be presented as an infinite scrolling feed to your users to like and share.

All that rich interactivity is complex and time-consuming to implement. Then there’s the technical difficulties involved in delivering the feed to all your users so they have a smooth, hiccup-free experience. You’re looking at 1000s of programmer hours whether you sit down and do it right and eat the delay, or launch with the basics working and iterate towards the complete solution.

stream provides APIs for client and server feed management as well SDKs for building apps and websites that integrate their feeds.

 

Authentication as a Service – Auth0

How many ways are there for potential customers to login and access your product? Email address + password? Social logins? Magic email link? SMS link? Let them use it anonymously and authenticate later? Multi-factor authentication using a code sent via SMS, voice, a one-time password app, a hardware key or biometrics? 

It depends, doesn’t it. But security is one of the hardest things to get right. A home-rolled solution will be enough for the early stages of development, but once you’re live on the internet your vulnerability is related to how much money, time and expertise you can spend on security.

Or you can use a provider such as Auth0 who is solely focused on secure authentication.  

 

Fraud Detection as a Service – Sift Science

As the pandemic created a surge in internet usage and online purchases, it also created a surge in digital fraud across both true fraud and friendly fraud categories. If you haven’t heard of friendly fraud, it mainly manifests as chargeback fraud – customers claiming they never received their order. 

Digital fraud requires cooperation and huge datasets to detect and defeat. It’s not something you can do on your own. Services like Stripe Payments and Sift Science integrate thousands of data feeds and signals – such as device fingerprints, transaction histories – to predict and mitigate fraud.

Should you be using their services? If you’re not sure, your accountant can probably tell you.  

 

Images as a service – imgix

Images have a huge impact on your users’ perception of your app or site. They can make it look more engaging, but due to their size loading them can also slow it down. If you rely on user-generated content, like a restaurant recommendation app would, or a marketplace, or you have your own deep catalogue of product images, then handling images and handling them well is an absolute necessity.

But manipulating images is technically challenging and delivering them quickly to your users takes planning and infrastructure.

Services like imgix save you from having to develop inhouse image editing and management expertise. It provides an API that can crop, resize and compress images, and a CDN for caching and delivering them to your users. 

You might say there are open source libraries for manipulating images and Amazon has a CDN, so why? You can ask the same question for every service in this article. The answer is time. Time now, as you move towards launch as quickly as you can, and time later, when you lose feature development hours to maintaining and debugging the code you wrote in house.  

 

Recommendations as a service – Algolia

You have an online store. It would be nice to increase Average Order Value by surfacing appropriate products for your customers. Where do you even start on that? Do your developers need to know statistics? Machine learning? Can you afford developers that already have the skills?

Even with a feature that will deliver a positive ROI it may end up being too expensive, again in time as well as money, to implement or just impossible. A lot of the modern user experience is pretty close to rocket science. But not everyone can hire rocket scientists.

But a service like Algolia lets you access that rocket science through an API that is easily integrated and with pricing that is easy to sign off on.

 

User Comms as a Service – twilio

There are dozens of services that will help you put a chatbox on your site or in your app. Making it easy for a customer to talk to a rep to help boost conversions is a strategy that is growing in popularity as it gets easier to implement.

A text chat today might lead later to a call to support after purchase or an email with warranty information or a newsletter with your latest offers.

We’re highlighting twilio for this category because their service offers APIs that allow you to integrate chat, voice and email comms with your customers. On top of the comms, it allows you to unify all your interactions with each customer to streamline engagement and allow you to personalise their interactions with your business.

This is the kind of feature you don’t even dream of being able to build for yourself. You use theirs and you’re grateful you can leverage it to your advantage.     

 

Payments as a Service

This is a no-brainer. There is no question you are going to use a third party payments API. You’re trying to launch here, not reinvent online banking. The question you have to answer is which one, or which ones, are you going to integrate?

And are you going to stick to straight payments or are you going to integrate a Buy Now Pay Later service like Afterpay or Klarna? 

 

Onboarding as a Service – Pendo

For an app or site of any complexity one of the biggest challenges is onboarding new users so they can use your powerful features, recognise the value of your product, and become long term customers.

This onboarding is handled by tours using on-screen pop-ups and overlays. The value is in the tour, not in the code that animates the tour.  

The advantage of integrating a service like Pendo is that their implementation of product tours has advanced to the point where it offers authoring tools. This frees your developers from having to dedicate time to what is intrinsically a marketing function. 

Pendo also collects data so you can see which features are being used, allowing you to continuously improve your onboarding experience and profit from it.

 

Shipping as a Service – ShipEngine

If your business deals in physical items then you’re going to be dealing with the headaches of shipping. It’s a time sink that cuts into the profits of every transaction.

Services like ShipEngine let you use a single integration to hook into a network of delivery and logistics companies, allowing you to optimise your costs and helping quickly and painlessly arrange local or national or international deliveries.

Security as a Service – Wazuh

Your business is online. You have a server. Perhaps multiple servers. Connected to the internet. What are you doing to keep your business secure? How much time and how many developers and devops can you dedicate to security? 

Staying current with threats and mitigations is a full-time job for a team. Being able to lean on the smarts of a large, dedicated security team through services like Wazuh reduces the risk of you being knocked offline or worse. 

Are you going to buy or build?

Software is a different kind of business. And if you have a website or an app make no mistake, you are in the software business. Pick almost any portion of an app or service and a deep expertise is either necessary or provides a huge advantage. 

This is what makes SaaS such a pervasive model. It’s the expense of expertise distributed across hundreds of customers. This business model is creating the re-usable modularity of functionality that software businesses have been wishing for since the 80s.

Any app can now launch with top-tier features in a fraction of the time and the fraction of the budget that was possible just five years ago.

You might worry about lock-in, and seeing money going out the door to other services might cause you physical pain, but that’s a problem that can be solved down the road when you are big enough for it to matter. 

For launching a new website or app, a strategic set of SaaS services can get you impressing customers and pulling in revenue faster than you can imagine, no matter how many developers you have.

The big $$$ questions about app development answered

We see the same questions about app development coming up again and again. It’s no surprise. More and more businesses are recognising that they need apps. Developing apps is a complex and opaque process. They’re big ticket items where unscrupulous operators don’t want to share numbers until they can guess how much you have to spend.

We’re going to fix that. By answering your questions. Many of them are of the “how long is a piece of string” variety. We can’t tell you how long a piece of string is, but in our answers we do give some recommendations on how you should be thinking about your string. Or, for this article, how to think about your app and how you’re going to get it built.

Q: How much does app development cost?

Short answer: Under $50,000 for a simple app. Under $150,000 for a basic app. Over $150,000 for a complex app.

Long answer:

You need to be comfortable with spending 5 and 6 figure sums if you want to build a competitive app. If you don’t think you’re going to earn the money back then now might not be the right time to start the process. Maybe start with a basic website.

The cost at each tier comes down to complexity. That complexity is a combination of frontend features, backend/admin features, third party integrations, the amount of business logic that needs to be encoded (after being documented!), and the variety and volume of traffic and transactions your app needs to handle.

A short discussion with us about your app, your market, and the features you want would enable us to tell you which range your app would fall into.

Q: Why does app development cost so much?

Short answer: Details x Time x Expertise

Long answer:

We understand this question. Unless you have worked as a developer on multiple similar projects it can be impossible to look at the screens of an app and see where 5 and 6 figure sums were spent. Hint: a lot doesn’t show up in the user interface.

App development costs what it does for two main reasons: it requires expertise and it takes time. And then there are the details. Building software is all about managing a mind-boggling number of details. It is not unlike building an actual sized house out of Lego bricks. Individually positioning all those little pieces adds up to a lot of time. And you need people who know how all the pieces fit together.

When looking at the cost it helps to remember app development is an investment. You invest in an app to generate revenue. Much as you might buy a machine for a factory, or pay to rent, fit-out and stock a brick and mortar retail store. You expect your big investment to give you more in return.

Of course you’re cost conscious. You spend your money wisely. That is why SoftwareSeni provides full transparency during the entire app development process. You can see the time spent at each stage of app development and even for each feature. Also for all the code that doesn’t touch the screen – the integrations with other services, the code that talks to the database, the code that creates the backend that your business will use.

Q: How long does app development take?

Short answer: At least a couple of months to launch. Then months to polish. Then years to grow.

Long answer:

Our business philosophy combines Lean and Agile methodologies. Under Lean, businesses want to be launching an MVP (Minimal Viable Product) as soon as possible to verify their idea, start gaining users, and start generating revenue.

This is done by implementing features in two-week work blocks called sprints under Agile. You won’t be launching your MVP app after 1 sprint, but 4 isn’t impossible, and 6 is feasible. All depending on your feature set and how far advanced your product conception is, of course.

And once launched, new features continue to be added using two-week sprints, along with addressing any user feedback received along the way.

This process results in lower upfront costs, puts a working Android app or iOS app, or both, in front of your customers sooner, and enables you to start generating revenue sooner.

Q: How big a team do you need for app development?

Short answer: 3-5 depending on the stage of development.

Long answer:

The app stores are filled with apps built by a single developer. So is that all you need?

Maybe? But there is only so much a single developer can do in a week. Or a month. There are only so many facets of app development a single developer can be an expert at. And how many developers are also experts at graphic design or UX or at running user testing?

And the big issue with a single developer – it only takes a single accident, or a single personal crisis, for your app development or app support to grind to a halt. What business wants to take on that risk profile?

A serious app, with a sensible launch schedule, that looks good, that works well and continues to work, requires a team. The size of that team depends on the app, its features, and how the development can be scheduled. But we find that, on average, at any particular stage of the app development process, you need about 3-5 people contributing.

It is a truism of software development that the best way to slow down a project is to throw more people at it. At SoftwareSeni we have launched enough apps, and our teams have collaborated on enough of these apps, that we’re pretty good at putting together the optimal team for creating your app.

Q: Should I develop an app?

Short answer: If you have to ask then you should develop a website first.

Long answer:

An app is a major investment. Are you sure you’re going to get a return on that investment? If you’re not sure, if you don’t have a ready market or an eager customer base, then it will be wiser to test your business idea using a website first.

A modern website, designed to be mobile-first, can approach the user experience of a dedicated native app with a lower upfront investment while providing you access to the entire global marketplace across all devices, not just phones.

Q: Should I develop an Android app or an iPhone/iOS app?

Short answer: Android if you want market reach, iPhone/iOS if you want to charge a premium.

Long answer:

In most of the world Android is the dominant mobile operating system, holding about 75% of the global market. But in some markets, like the US, UK, Canada and Australia, iOS holds more than half of the market.

This difference in market share, and user base, leads to a non-intuitive result. Global non-game app revenue in 2020 was $32.1 billion. Despite its smaller global market share, about 25%, iOS apps captured $24.7 billion, 77%, of that revenue.

The decision to develop an Android app or an iPhone app comes down to knowing where your audience is and what your goal is.

For markets like Australia, USA, UK and Canada, where the market is almost evenly split, it’s lucky that there are frameworks like React Native that make developing apps for both platforms financially feasible. But still we would recommend focusing on your iOS app first, because that platform will likely provide most of your revenues.

Q: How long does it take for an app to earn back its development cost? Also: How long does it take for an app to cover its running costs?

Short answer: If you read the first question you already know the answer.

Long answer:

This question is looking at app development backwards. You should not be spending money on developing an app, or purchasing any asset, without forecasting or modeling costs and revenue.

The real question should be: given my forecast revenue and current budget, can I build an app with the planned feature set, keep it running, and market it?

(You don’t want to forget your marketing budget. Expecting enough people to simply stumble across your app is not a path to success.)

If the answer to the real question is no, you don’t have enough money to do all that, then you are left with three options:

  1. Don’t develop an app. Put your money towards another revenue generating project.
  2. Reduce the scope of your app. Will a simpler, less expensive app bring in enough revenue to fund further development?
  3. Build a website instead. This is a faster way to reach an even larger market. Websites can have app-quality interaction (at a price). This approach can allow you to invest even less up front and still have a foundation you can extend as revenue grows. With proper planning, converting it to an app when revenue allows can be quite cost effective.

Still have questions about that app you want developed?

Hopefully by answering the big questions about app development we’ve helped you think strategically about getting your app developed.

If you find you have more detailed questions on costs and starting app development then get in contact with us. We’re always up for a chat and we love finding revenue-focused solutions to app creation.

Now, if you feel like you want a little more background on app development before talking to us, we have written a series of short, easy-to-read articles on the process:

A quick guide to Agile for businesses and start-ups
What is product conception and how to do it
How to prototype your app
Business rules and the business logic that drives your app
How the app development process works

Also, here are two articles that will help with your decision making:

Should you build an app or a website?
Fixed price contract vs Agile for app development

Contact us here for any questions you still need answered.